Banks move into crypto custody

Morgan Stanley is pushing deeper into crypto by seeking a bank charter that would let it hold clients’ digital assets directly. (forbes.com) The Office of the Comptroller of the Currency received the application on February 18, 2026, for a new unit called Morgan Stanley Digital Trust, National Association. The business plan says the unit would custody digital assets and handle purchases, sales, swaps, transfers, and fiduciary staking for clients. (forbes.com) Morgan Stanley is also mapping out products beyond Bitcoin. Amy Oldenburg, the bank’s head of digital assets strategy, said this week that the firm is looking at tokenized funds and tax-focused crypto tools after launching its bank-issued spot Bitcoin exchange-traded fund. (decrypt.co) Crypto custody is the business of safeguarding the private keys that control digital tokens, much like a vault holds the keys to cash and securities. For large banks, bringing that function in-house means clients can buy, hold, and potentially stake crypto inside a regulated wealth platform instead of relying on a separate crypto specialist. (forbes.com) The regulatory backdrop has shifted with it. On March 17, 2026, the Securities and Exchange Commission said its new interpretation clarifies how federal securities laws apply to airdrops, protocol mining, protocol staking, and the wrapping of a non-security crypto asset. (sec.gov) The agency has also been unwinding several high-profile crypto lawsuits filed in the previous enforcement cycle. The Securities and Exchange Commission announced the dismissal of its civil cases against Coinbase on February 27, 2025, and against Binance and founder Changpeng Zhao on May 29, 2025, while Ripple and the agency ended their appeals in August 2025. (sec.gov, sec.gov, decrypt.co) Bank regulators have been opening the door too. The Office of the Comptroller of the Currency said in Bulletin 2026-4 that national trust banks may engage in non-fiduciary activities alongside fiduciary ones, and the rule took effect on April 1, 2026. (occ.gov) That matters for firms trying to turn crypto from a trading sideline into a custody and fund business. Forbes reported that Morgan Stanley’s application followed a wave of conditional approvals for crypto-focused trust charters, including approvals in December 2025 for Circle, Ripple, BitGo, Fidelity Digital Assets, and Paxos, and in February 2026 for Bridge, Crypto.com, and Protego. (forbes.com) Morgan Stanley is entering from a position of scale. Its fourth-quarter 2025 report said wealth and investment management client assets reached $9.3 trillion, with more than $350 billion in net new assets. (forbes.com) The unresolved question is how far regulators will let banks go from custody into trading, staking, and tokenized funds without new legislation. Morgan Stanley’s filing shows Wall Street is preparing for that answer inside the banking system, not outside it. (occ.gov, sec.gov)